Ballard to Sell Automotive Fuel Cell Assets to Ford, Daimler; Will Concentrate on Commercial Markets

November 8, 2007 – Vol.12 No.33

Ballard to Sell Automotive Fuel Cell Assets to Ford, Daimler; Will Concentrate on Commercial Markets.

A new private company will be established with Ballard in a minority interest that will continue to develop automotive fuel cell power systems. The new company will be located at Ballard facilities. Ballard, Daimler and Ford have also agreed to terminate the Automotive Alliance Agreement that had defined their respective responsibilities for automotive fuel cell development work.

In the agreement Ballard will transfer to Ford and Daimler:

--- automotive fuel cell intellectual property.

--- 113 employees, primarily in the research and technology development areas (20% of Ballard’s workforce).

--- Certain test equipment and inventory (book value of $6 million).

Ballard will invest $60 million in the new company, together Ford and Daimler will contribute the same. Payment for the fuel cell assets will consist of all 34.3 million shares valued at approximately $168 million held by Ford and Daimler. Shares will then be canceled. Ballard expects a gain of $95 to $105 million in the deal along with a reduction in annual cash outlay of $15 million.

Ballard will not be obligated to provide any ongoing funding to the new private company.

Ballard will also:

--- Receive rights to use automotive intellectual property in non-automotive applications, including both the transferred and future intellectual property developed by any of the private company, Daimler and Ford.

--- Provide contract technical services to the private company, on a profitable basis.

--- Manufacture fuel cells for the private company, Daimler and Ford, on a profitable basis.

Ballard will continue to develop, market and sell fuel cell products for commercial markets such as materials handling, backup power and residential cogeneration. The company will continue to fulfill current bus demonstration program contracts, including the supply of fuel cell modules for up to 20 BC Transit fuel cell buses as well as actively pursue additional fuel cell bus demonstration program opportunities.

The transaction still needs regulatory approvals, approval by the Daimler Supervisory Board and approval by a simple majority of Ballard’s shareholders, excluding any votes cast by Daimler or Ford. (11/7/07)

Links:

Ballard
http://www.ballard.com

Disclaimer, Forward-Looking or Safe Harbor Statement on original press release: Yes